Clothing Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 35,000 clothing retailers in the US generate revenue by selling a variety of apparel and apparel-related products to consumers. Clothing stores sell primarily new clothing, and may specialize in a particular category, such as men, women, children, infants, families, or accessories. Family clothing stores account for 57% of industry sales. Women’s clothing stores are 19%; other specialty stores are 20%, and men’s clothing stores are 4%.
Seasonality of Demand
Most clothing stores experience major seasonal fluctuations during the winter holiday and back-to-school periods.
Trends and Fads Rapidly Change
The clothing industry is in a constant state of change, driven by fashion trends and fads.
Industry size & Structure
The average clothing retailer employs fewer than 25 workers and generates $5-6 million annually.
- The clothing retail industry consists of about 35,000 companies that employ 851,300 workers and generate about $225 billion annually.
- Family clothing stores account for 57% of industry sales. Women's clothing stores are 19%; other specialty stores are 20%, and men's clothing stores are 4%.
- The industry is concentrated at the top, and highly fragmented at the bottom. The top 20 firms account for 55% of industry sales.
- The average independent clothing retailer operates out of a single location, employs fewer than 10 workers, and generates between $300,000 and $900,000 annually.
- The industry includes national chains, regional chains, and independent retailers. Some large apparel manufacturers have retail operations.
- Large companies include TJX Companies (TJ Maxx, Marshalls), The Gap, Victoria's Secret & Co., American Eagle Outfitters, and Ross.
Industry Forecast
Clothing Stores Industry Growth
Recent Developments
Apr 9, 2024 - Slower Growth Forecast
- The US clothing stores industry is projected to grow at a CAGR of slightly over 2% from 2024 to 2028, slower than the overall economy's growth, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. Retail and wholesale industries are expected to be boosted by higher consumer confidence levels, and consumer sentiment has seen a degree of improvement following sustained lower levels. Factors limiting spending are high prices and interest rates, though both are expected to improve in 2024. Post-pandemic, consumer spending has shown slower gains of 2.5% in 2022 and 2.2% in 2023, supported in part by savings amassed by households from federal pandemic relief programs. According to the forecast, "2024 may bring further deceleration, but improving consumer sentiment may support moderately strong gains in household spending, together with rising wage rates and lower inflation."
- The National Retail Federation (NRF) released its 2024 retail sales forecast, projecting an increase of between approximately 2.5% and 3.5% to $5.23 trillion and $5.28 trillion in sales. The projected growth aligns with the 10-year pre-pandemic average annual sales growth of 3.6% and compares with the 2023 annual sales growth of 3.6%, which reached $5.1 trillion. Non-store and online sales (included in the total figure) are expected to grow at a higher rate of 7% to 9% year over year, to a range of $1.47 to $1.5 trillion, compared to $1.38 trillion in 2023. A tight labor market is expected to cool in 2024, with about 100,000 fewer jobs on average per month projected in 2024 compared to 2023. The NRF forecast excludes automobile dealers, gas stations, and restaurants to focus on core retail.
- According to a recent ConsumerSignals survey by Deloitte, about 75% of consumers worldwide have made at least one splurge purchase to treat themselves in the past month. The average amount spent on the last splurge purchase was $45. The survey examined consumer spending behavior and found that the three main drivers for splurge purchases were comfort (22%), relaxation (15%), and practicality/usefulness (12%). The most popular categories for splurge purchases included food and beverage (43%), clothing and accessories (18%), personal care (11%), electronics and accessories (8%), toys and hobbies (6%), health and wellness (5%), home and kitchen (3%), and household goods (3%). According to the Spending Intentions index, global total spending intentions remained consistent in January compared to December and were significantly higher than a year ago.
- Consumer confidence levels were essentially unchanged in March 2024 from February 2024, after a dip in February following three consecutive months of growth, according to data from The Conference Board. The Conference Board’s consumer confidence index was 104.7 in March 2024 from 104.8 in February 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future.” Peterson added that confidence rose among householders 55 and over but fell for those under 55. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
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